Update shared on 27 Oct 2025
Fair value Increased 23%Fresnillo's analyst price target has been raised significantly, increasing from £18.36 to £22.64, as analysts anticipate stronger revenue growth and improved profit margins. This change is driven by higher long-term gold price forecasts.
Analyst Commentary
Recent revisions from major brokerages have spotlighted significant optimism regarding Fresnillo's prospects, while several analysts continue to urge caution on valuation and structural challenges. Below are the key takeaways from recent Street research:
Bullish Takeaways- Bullish analysts are citing a substantial increase in long-term gold price forecasts, which is driving expectations of stronger revenue growth and improved margins for Fresnillo.
- The majority of upward price target revisions suggest over 50% upside potential to fair value estimates by late 2027, supported by favorable industry trends for European miners.
- Several firms have reiterated positive ratings, seeing Fresnillo as well positioned to benefit from increased demand and ongoing operational efficiency improvements.
- Recent moves to raise targets by major financial institutions reflect confidence in Fresnillo's ability to execute on its growth strategy and deliver shareholder value.
- Bearish analysts remain cautious about Fresnillo's relative valuation following the sharp uptrend in price targets, with some maintaining Underweight or Hold ratings.
- Concerns persist regarding execution risks and market volatility, which could limit near-term upside despite positive commodity forecasts.
- Some research voices point to lingering questions on operational challenges, indicating that not all anticipated margin improvements are assured.
What's in the News
- Fresnillo issued updated production guidance for 2025, 2026, and 2027, anticipating attributable silver output between 47.5 and 54.5 million ounces and gold output between 550,000 and 590,000 ounces in 2025, with similar ranges expected for subsequent years (Key Developments).
- Total production, expressed in silver equivalent ounces, is forecasted to reach up to 102 million ounces in 2025 and range from 88 million to 101 million ounces for 2026 and 2027 (Key Developments).
- The Board of Directors declared an interim dividend of 20.8 US cents per share, totaling USD 153.3 million. The dividend is scheduled to be paid on 17 September 2025 to eligible shareholders (Key Developments).
Valuation Changes
- Consensus Analyst Price Target has increased from £18.36 to £22.64, representing a significant upward revision.
- Discount Rate has risen slightly, moving from 9.58% to 9.58%.
- Revenue Growth expectation has surged from 3.05% to 8.34%.
- Net Profit Margin has improved moderately, increasing from 32.73% to 34.53%.
- Future P/E ratio has remained relatively stable, changing marginally from 16.81x to 16.85x.
Disclaimer
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